Australian bonds slump following weakness in U.S. Treasuries after upbeat retail sales

The Australian bonds slumped Wednesday as the yield on benchmark US 10-year bonds climbed, rising 6 basis points to 2.27% after July's US advance retail sales data surprised to the upside.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 2 basis points to 2.685 percent, the yield on 15-year note also jumped 2 basis points to 2.985 percent and the yield on short-term 2-year traded nearly 3 basis points higher at 1.843 percent by 02:30 GMT.

U.S. retail sales recorded their biggest increase in seven months in July as consumers boosted purchases of motor vehicles as well as discretionary spending, suggesting the economy continued to gain momentum early in the third quarter.

The Commerce Department said retail sales jumped 0.6 percent last month, the largest gain since December 2016 and followed June's upwardly revised 0.3 percent rise. Additional support seen from the NY Fed manufacturing activity index that came in at 25.2, well above an expected 10.0 reading

Lastly, markets will now be focusing on the country’s employment report for the month of July, scheduled to be released on August 17 by 01:30GMT, which will provide further direction in the debt market.

Meanwhile, the S&P/ASX 200 index traded 0.10 percent higher at 5,708.5 by 02:40 GMT, while at 02:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 43.95 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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